Thailand’s government increased its
diesel subsidy to oil companies by 0.5 baht (2 cents) per liter,
which will deplete the state oil fund soon, Energy Minister
Wannarat Charnnukul said.

The government will need to seek other measures, including
raising pump prices or decreasing excise taxes, Wannarat told
reporters in Bangkok today.

“I don’t want the fund to go negative again like in the
past,” he said.

Prime Minister Abhisit Vejjajiva’s government has kept the
diesel price under 30 baht since December. After deducting
subsidies for retail prices of liquefied petroleum gas and
natural gas for vehicles, the fund has about 7 billion baht
($229.7 million), he said. Earlier, he had said the fund would
reach 7 billion baht by the end of the month.

The government previously aimed to keep the fund balance
above 10 billion baht.

Today’s increase means the government is now subsidizing
diesel by 5 baht per liter to keep the retail price from rising
above 30 baht per liter, he said. Abhisit reiterated yesterday
that he wants to keep the diesel subsidy until April to ease the
public burden.